A. COURTNEY COX UNITED STATES ATTORNEY

Nine Executive Drive, Fairview Heights, Illinois 62208, Telephone (618) 628-3700

For Immediate Release

APRIL 18, 2008

JURY CONVICTS TELEMARKETER IN $40 MILLION
CREDIT CARD SCAM

A Courtney Cox, United States Attorney for the Southern District of Illinois, announced today that on Friday, April 18, 2008, KYLE KIMOTO, age 32, was found guilty following a two-week trial, of one count of conspiracy, one count of mail fraud and twelve counts of wire fraud.

Evidence presented at trial proved KIMOTO was the owner of Assail, Inc., a Nevada Corporation whose principal place of business was St. George, Utah, and did business with the public under the names of Advantage Capital, Capital First, Premier One, Bay Area Business Council and American Leisure Card. He was indicted by a Federal Grand Jury sitting in East St. Louis, Illinois, on June 20, 2007. The indictment alleged that the scheme operated out of Utah and utilized a network of

U.S. outbound call centers KIMOTO organized in Utah, Kansas, Oregon, Idaho, Arizona, Virginia, Florida, Carribean outbound call centers in Grenada, St. Lucia, St. Vincents; an outbound call center in Toronto, Canada, and outbound call centers in India. The indictment alleged that the scheme affected victims in 34 of the 38 counties comprising the Southern District of Illinois, and victimized over 300,000 consumers throughout the United States, in an amount of approximately $43 million.

The indictment alleges that the defendant, and his co-conspirators, obtained lead lists of consumers who had applied for and had been turned down for credit cards. Utilizing these lists, a cold call was made to consumers by telemarketers. According to the indictment, the telemarketer would begin the conversation by telling the consumer that “our records indicate that within the past 12 months, you filed an application for a credit card and you are now eligible to receive your MasterCard.,”implying that the caller was calling from the consumer’s financial institution. The telemarketer would then ask the consumer questions about monthly income “to verify that my records are still correct.” After the consumer provided the information, the consumer would be placed on hold “for computer authorization” after which the consumer would be told that the consumer was to receive a “MasterCard.” The consumer was further told that the card would improve the consumer’s credit rating, specifically through Equifax. After paying what was characterized as a “one time” processing fee of anywhere from $159 to several hundred dollars, the consumers generally received a “benefits package.” Rather than containing a credit card as promised, the package contained an application for a stored value MasterCard, a form of debit card that had no credit line and which had to be “loaded” with funds before it could be used.

The defendant was convicted of Conspiracy to Commit Mail Fraud, Wire Fraud and Money Laundering, one count of Mail Fraud, and twelve counts of Wire Fraud. The violations took place from about January, 2001 through approximately October 25, 2002. Defendant could be sentenced to a term of imprisonment not to exceed 175 years, a fine of $3,500,000 and five years supervised release.

The case was investigated by the U.S. Postal Inspection Service in St. Louis, and the Internal Revenue Service Criminal Investigation in Reno, Nevada. Substantial assistance was provided by the Federal Trade Commission in Chicago and Washington, DC. Also assisting was th Competition Bureau Canada. The case was prosecuted by Assistant U.S. Attorney Bruce E. Reppert.